Lansing— State Treasurer Andy Dillon said Friday he is resigning his position in Gov. Rick Snyder’s administration and blamed the departure on his recent messy divorce.
Dillon’s resignation comes one day after he testified in Detroit’s bankruptcy case and was accepted Friday by Snyder “with regret but understanding.”
“It has become clear to me — as it likely is to most — that it is unfair to my family and the residents of Michigan, to allow issues related to my recent divorce and the unfortunate acrimony associated with it to be a continued source of media attention and scrutiny,” Dillon said in a statement.
Dillon, the former Democratic House speaker from 2007 to 2010, has been dogged in recent weeks by a series of personal problems stemming from his divorce to Carol Owens-Dillon in March.
The Wayne County Prosecutor’s Office in August declined to press assault charges against Dillon after his ex-wife claimed he twisted her arms in a struggle for his state-issued cell phone during a July incident outside of their marital home in Redford Township.
Separately, Dillon’s secretary, Amy U. Hichez, is suing Dillon’s ex-wife for defamation after Carol Owens-Dillon claimed on Facebook that Dillon and Hichez were having an extramarital affair just before the Dillons split up in late 2011. Hichez has denied the adultery charge.
“My family deserves privacy and our residents deserve to know their state treasurer is not distracted by such issues and events,” Dillon said in the statement. “For these personal and professional reasons, I have determined it is in the best interests of all that I resign.”
Dillon has had a high profile in the Snyder administration, serving as the Republican governor’s front man on dealing with financially distressed cities and school districts. Just this week, Dillon finalized the terms of the state’s consent agreement with the troubled Pontiac School District.
He also has been a central figure in the state’s historic takeover of Detroit’s city government while trying to tame a jittery municipal bond market.
“He has had a big, big role in trying to get the city of Detroit through its troubles (in bankruptcy), and he understands the financial nuances,” said Douglas Bernstein, managing partner of Plunkett Cooney’s Banking, Bankruptcy and Creditors’ Rights Practice Group in Bloomfield Hills. “Replacing him and getting that person (successor) up to speed is going to be very tough.”
Snyder recognized those skills in accepting Dillon’s resignation.
“He has been instrumental in many of the comprehensive reforms that are contributing to Michigan’s comeback,” Snyder said. “Andy has demonstrated time and again that he was the right person at the right time to serve as treasurer. I respect his decision to seek new opportunities and offer my sincere gratitude for his years of selfless service to our state.”
Detroit Emergency Manager Kevyn Orr enjoys a friendship and good working relationship with Dillon, Orr’s spokesman Bill Nowling said Friday, adding that “Andy Dillon has been a tireless advocate for Detroit and its citizens.”
Dillon said he would stay on until the governor selects a successor and would help with the transition.
The Michigan AFL-CIO questioned the timing of the move.
“Why would Dillon step down now, just as Governor Snyder’s secretive NERD Fund is beginning to receive serious scrutiny?” Michigan AFL-CIO President Karla Swift said in a statement about the fund that finances some expenses of Detroit Emergency Manager Kevyn Orr. “We respect the Dillon family’s need for privacy, but wonder why it wasn’t an issue months ago.”
Lansing pundit Bill Ballenger said Snyder’s next appointee as treasurer is unlikely to make the same splash as did Dillon — a former House speaker from the opposing Democratic Party who had accounting and law degrees as well as experience in the financial lending markets.
“I think Snyder will settle for someone who’s just quietly competent at this point,” added Ballenger, a former lawmaker and publisher of the Inside Michigan Politics newsletter.
Dillon rose to prominence as two-term speaker of the House, where his centrist politics sometimes raised the hackles of unions and more-liberal party members.
Former Democratic Party state chairman Mark Brewer speculated Dillon’s low-key political style prompted the politically moderate Snyder to pick him as treasurer.
“Personally, I wish him well,” Brewer said. “We’ve always gotten along, even when we’ve had differences.”
Shortly after Dillon lost the August 2010 Democratic primary for governor to Lansing Mayor Virg Bernero, Snyder’s gubernatorial campaign asked him if he’d consider joining the administration, before Snyder defeated Bernero in the general election.
Dillon recounted the courtship Thursday while being deposed by attorneys for labor unions contesting Detroit’s eligibility for bankruptcy, according to a draft transcript obtained Friday by The Detroit News.
“Initially, I respectfully declined because I was ready to go back to the private sector, and I reconsidered about two weeks later called back and said ‘If you haven’t filled it, I’ll do it,’” Dillon testified. “… And even though I had spent six years in Lansing, I didn’t fully appreciate the role of the treasurer for the state … and (it was a) fascinating time to have it.”
Dillon is a problem-solver, said Rep. Phil Cavanagh, D-Redford, who succeeded him.
“I didn’t see him as extremely partisan,” Cavanagh said. “He didn’t think you got things done by going too far to the right or too far to the left, which made some people unhappy.”
Lansing communications executive Kelly Rossman, a longtime friend, said Dillon is an “extremely private individual” who had grown weary of having his personal life and acrimonious divorce dredged up in public.
“He’s done with that,” said Rossman, chief executive and principal for Truscott Rossman Group LLC. “Unlike a lot of politicians, he just never got comfortable with the media.”
Rossman predicted Dillon will readily find a new job in the private sector. He headed a firm specializing in business turnarounds before entering state politics.
Matt Fabian, managing director of Municipal Market Advisors, a Concord, Mass., bond market research firm, said Dillon could ultimately land a job working for a bankruptcy law firm because of his work in ushering Detroit into Chapter 9 proceedings with the goal of wiping out general obligation bondholders.
Bankruptcy law firms, Fabian said, “want to set a precedent because they want to create a pipeline for future work for their businesses.”
Some financial industry insiders have speculated Dillon’s future career options could be harmed because of his past pronouncements that Michigan municipal bonds were safe investments before Detroit began defaulting on its bonds.
“I think he has said that because he’s the treasurer of the state and that’s what he’s paid to say,” Fabian said.
Ballenger agreed Dillon, whose dad was a well-known Redford judge, is likely done with public life.
“He’s probably well rid of it,” Ballenger said. “The bottom line is that he hasn’t done anything wrong (as treasurer) ... (but) problems with his personal life have dogged him and dragged him down.”